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CALGARY, ALBERTA - Solium Capital Inc. ("Solium" or the "Company") today announced its financial results for the year ended December 31, 2003. Solium specializes in technology and services for the administration of equity-based incentive and savings programs. Through its web-based applications, Solium is focused on redefining the service standard for public corporations and their employees. The Company achieved a number of milestones during 2003:
Revenue Gross revenue from E-SOAP services in 2003 was $863,000, an increase of $363,000 or 73% from $500,000 in 2002. This increase is attributable to (1) increased license fees through the growth of the Company's client base; and (2) a full twelve months of exercise fees applicable to 2003. Corporate license fees for E-SOAP totaled $705,000 in 2003 compared to $471,000 in 2002. The Company ended the year with 20,294 participants generating revenue on E-SOAP. This represents a growth of 65% from the 12,300 enrolled as at December 31, 2002. During 2003, seven new corporate clients were activated onto E-SOAP through direct sales, and one new client was added through the relationship with GRS Securities Inc. In late 2002, the Company began charging an administrative fee to option holders each time an option is exercised through E-SOAP ("exercise fees"). These exercise fees totaled $144,000 in 2003 compared to $22,000 in 2002. This source of revenue is becoming increasingly significant as more clients are activated onto E-SOAP and as stock market conditions improve. Consulting services revenue totaled $8,500 in 2003 compared to $145,000 in 2002. The decrease is due to the winding down of consulting contracts in Stormworks Ltd. ("Stormworks"), the subsidiary purchased effective May 1, 2002. As planned, by July 2002, key Stormworks employees were integrated into the Company's ongoing operations to focus solely on Solium's business plan. Expenses Salaries and wages expense for 2003 was $1,389,000 compared to $1,069,000 in 2002. Included in the expense for 2003 was approximately $30,000 of stock option expense. The Company adopted the fair value based method of accounting for stock options in accordance with the CICA Handbook, Stock-Based Compensation and Other Stock-Based Payments. This treatment has been adopted prospectively, with an expense recognized only for options granted on or after January 1, 2003. The Company had an employee base of 22 people at the end of 2003 compared to 14 people at the end of 2002. This increase in staff is mainly attributable to the integration of personnel from Bitonic. The increase to salaries and wages expense in 2003 resulting from the acquisition of Bitonic was somewhat offset by a decrease to severance expenses which were incurred in the second quarter of 2002 and did not reoccur in 2003. In the third quarter of 2003, the Company added two individuals to its development team to aggressively pursue development of the new Share Purchase platform in anticipation of launching this product in the first quarter of 2004 in accordance with the strategic alliance with GRS Securities Inc. General and administrative costs totaled $793,000 in 2003 compared to $1,208,000 in 2002. The decrease is mainly a result of decreases to recurring data feed costs of $140,000, rent costs of $112,000, systems and operating costs associated with Stormworks of $53,000, professional and legal fees of $45,500, and regulatory costs of $20,000; and an increase in bank interest revenue of $40,000. These decreases to expense were offset by an increase of approximately $35,000 in travel costs incurred mainly in the third quarter relating to increased sales activity in Eastern Canada and work on the strategic alliance with GRS Securities Inc. in Ontario. Amortization expense was $183,000 in 2003 compared to $94,000 in 2002. The increase is a result of the amortization of capital assets added through the acquisition of Bitonic. $100,000 in debenture interest was incurred in 2003, on the $1,000,000 of demand debentures that were issued at the end of 2002. In the year ended December 31, 2003, $188,000 of expense was incurred through the write-off of goodwill associated with the acquisition of Bitonic. The goodwill arose due to a delay in closing the acquisition resulting in the net asset value of Bitonic being lower than the agreed upon purchase price by $188,000. This reduction of $188,000 in net asset value was economically offset by approximately $185,000 of salaries incurred by Bitonic during the intervening period that would have been incurred by Solium if the acquisition had closed immediately. For accounting purposes, the $188,000 was recorded as goodwill. The goodwill was subsequently written off, as the Company made the decision to wind down all of Bitonic's external contracts and focus all of Bitonic's employees on Solium's internal development projects. During 2003, the Company recorded $260,000 in tax credit refunds relating to scientific research and development performed by the Company in 2000 and by Bitonic in 2001. Development costs of $78,000 incurred in 2002 did not reoccur as a result of the internalization of systems development through the acquisition of Bitonic. Net Financial Results The net loss for the year ended December 31, 2003 was $1,519,000 compared to a net loss of $1,919,000 in 2002. The improvements to the financial results are attributable to the factors described herein. Additional Information
A more detailed set of financial statements and management's discussion and analysis may be accessed at the links below: The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. FOR FURTHER INFORMATION PLEASE CONTACT:
Solium Capital Inc. |
